Beruflich Dokumente
Kultur Dokumente
DECISION
MENDOZA , J : p
In this petition for review on certiorari 1 under Rule 45, the Commissioner of
Customs (Commissioner), represented by the Of ce of the Solicitor General (OSG),
assails the April 11, 2008 Resolution 2 of the Court of Tax Appeals En Banc (CTA-En
Banc), in C.T.A. E.B. No. 333, dismissing his petition for review for his failure to le a
motion for reconsideration before the Court of Tax Appeals Division (CTA-Division).
Respondent Marina Sales, Inc. (Marina) is engaged in the manufacture of
Sunquick juice concentrates. It was appointed by CO-RO Food A/S of Denmark, maker
of Sunquick Juice Concentrates, to be its manufacturing arm in the Philippines. As such,
Marina usually imports raw materials into the country for the purpose. In the past, the
Bureau of Customs (BOC) assessed said type of importations under Tariff Heading
H.S. 2106.90 10 with a 1% import duty rate. 3
On March 6, 2003, Marina's importation, labeled as Import Entry No. C-33771-03,
arrived at the Manila International Container Port (MICP) on board the vessel APL Iris V-
111. Said Import Entry No. C-33771-03 consisted of a 1' x 20' container STC with a
total of 80 drums: (a) 56 drums of 225 kilograms Sunquick Orange Concentrate; and
(b) 24 drums of 225 kilograms of Sunquick Lemon Concentrate. 4 It was supported by
the following documents: (a) Bill of Lading No. APLU 800452452 dated February 2,
2003; 5 and (b) CO-RO Food A/S of Denmark Invoice No. 1619409 dated January 27,
2003. 6
Marina computed and paid the duties under Tariff Harmonized System Heading
H.S. 2106.90 10 at 1% import duty rate.
This time, however, the BOC examiners contested the tariff classi cation of
Marina's Import Entry No. C-33771-03 under Tariff Heading H.S. 2106.90 10. The BOC
examiners recommended to the Collector of Customs, acting as Chairman of the
Valuation and Classi cation Review Committee (VCRC) of the BOC, to reclassify
Marina's importation as Tariff Heading H.S. 2106.90 50 (covering composite
concentrates for simple dilution with water to make beverages) with a corresponding
7% import duty rate. SAaTHc
SO ORDERED.
The Commissioner disagreed and elevated the case to the CTA-En Banc via a
petition for review. 2 1
In its Resolution of April 11, 2008, the CTA En Banc dismissed the petition. The
pertinent portions of the decision including the fallo read:
A careful scrutiny of the record of this case showed that petitioner failed to le
before the Second Division the required Motion for Reconsideration before
elevating his case to the CTA En Banc.
Section 1, Rule 8 of the Revised Rules of the Court of Tax Appeals provided for
the following rule, to wit:
RULE 8
PROCEDURE IN CIVIL CASES
In statutory construction, the use of the word "must" indicates that the
requirement is mandatory. Furthermore, the word "must" connote an imperative
act or operates to simply impose a duty which may be enforced. It is true the word
"must" is sometimes construed as "may" permissive but this is only when the
context requires it. Where the context plainly shows the provision to be
mandatory, the word "must" is a command and cannot be construed as
permissive, but must be given the signification which it imparts.
It is worthy to note that the Supreme Court ruled that a Motion for
Reconsideration is mandatory as a precondition to the ling of a Petition for
Review under Rule 43 of the Rules of Court.
WHEREFORE, applying by analogy the above ruling of the Supreme Court and
taking into consideration the mandatory provision provided by Section 1 of Rule 8
of the Revised Rules of the Court of Tax Appeals and considering further that
petitioner did not le a Motion for Reconsideration with the Second Division
before elevating the case to the Court En Banc, which eventually deprived the
Second Division of an opportunity to amend, modify, reverse or correct its mistake
or error, if there be, petitioner's Petition for Review is hereby DISMISSED.
SO ORDERED. 2 2
The Commissioner sought reconsideration of the disputed decision, but the CTA
En Banc issued a denial in its July 14, 2008 Resolution. 2 3
Hence, this petition.
CD Technologies Asia, Inc. 2016 cdasiaonline.com
In his Memorandum, 2 4 the Commissioner submits the following issues for resolution:
A.
The Commissioner argues that the dismissal of his petition before the CTA-En
Banc is inconsistent with the principle of the liberal application of the rules of
procedure. 2 6 He points out that due to the dismissal of the petition, the government
would only be collecting 1% import duty rate from Marina instead of 7%. 2 7 This, if
sanctioned, would result in grave injustice and unfairness to the government. 2 8
The Commissioner also contends that the testimony of Marina's expert witness,
Aurora Kimura, pertaining to Sunquick Lemon compound shows that it could be
classi ed as "heavy syrup" 2 9 falling under the category of H.S. 2190.90 50 with a 7%
import duty rate. 3 0
The Court finds no merit in the petition.
On the procedure, the Court agrees with the CTA En Banc that the Commissioner
failed to comply with the mandatory provisions of Rule 8, Section 1 of the Revised Rules
of the Court of Tax Appeals 3 1 requiring that "the petition for review of a decision or
resolution of the Court in Division must be preceded by the ling of a timely motion for
reconsideration or new trial with the Division." The word "must" clearly indicates the
mandatory not merely directory nature of a requirement." 3 2
The rules are clear. Before the CTA En Banc could take cognizance of the petition
for review concerning a case falling under its exclusive appellate jurisdiction, the litigant
must suf ciently show that it sought prior reconsideration or moved for a new trial with
the concerned CTA division. Procedural rules are not to be tri ed with or be excused
simply because their non-compliance may have resulted in prejudicing a party's
substantive rights. 3 3 Rules are meant to be followed. They may be relaxed only for very
exigent and persuasive reasons to relieve a litigant of an injustice not commensurate to
his careless non-observance of the prescribed rules. 3 4 cDACST
At any rate, even if the Court accords liberality, the position of the Commissioner
has no merit. After examining the records of the case, the Court is of the view that the
import duty rate of 1%, as determined by the CTA Second Division, is correct.
The table shows the different classi cation of Tariff import duties relevant to the
case at bar:
TARIFF IMPORT COVERAGE
HEADING DUTY RATE
In view of the foregoing subject article is classi able under Tariff Heading
H.S. 2106.90 10 at 1% for entries led under the old regime. For those led
under the new regime tariff heading AHTN 2106.90 51 at 1% where the
item are specifically provided.
RESOLUTION: To apply sub-group recommendation which is to adopt
H.S. 2106.90 10 at 1% for entries led under the old regime and
for those led under the new regime, AHTN 2106.90 51 at 1%
where the item are specifically provided. 3 9
To "manufacture" is to "make or fabricate raw materials by hand, art or
machinery, and work into forms convenient for use." 4 0 Stated differently, it is to
transform by any process into another form suitable for its intended use. Marina, as the
manufacturing arm of CO-RO Food A/S of Denmark, transforms said juice compounds,
being raw materials, into a substance suitable for human consumption. This is evident
from the "Commissioner's Report" 4 1 of Executive Clerk of Court II, CTA, Jesus P.
Inocando, Jr., who conducted an ocular inspection of Marina's manufacturing plant in
Taguig City. Pertinent excerpts of the "Commissioner's Report" are herein reproduced:
HTCESI
Per observation of the undersigned, the imported compounds (raw materials) are
very sticky, the plant is clean and that the personnel of petitioner in the plant
strictly following the manufacturing process as presented in Annex A and Annex
B of this report.
Footnotes